Linda Sabor says Obamacare was a godsend. As the health care law enters its third year, her faith is starting to waver.

Last month, her insurance company gave the 59-year-old Palatine resident some bad news. Blue Cross and Blue Shield of Illinois canceled the health plan that she and her husband have had the past two years. The company offered a plan for next year that has a similar network and benefits that would cost $1,142.24 a month, $325 more than their current monthly premium.

Illinois residents are dealing with hefty inflation when they log on to HealthCare.gov for the Affordable Care Act's third open enrollment season, which began Nov. 1. Some health care consumers are seeing rate increases of 40 percent or more. Rate increases for the lowest-cost plans in the majority of counties are in the 15 to 20 percent range, according to the Illinois Department of Insurance.

Blue Cross is the target of a lot of consumer unhappiness. The state's dominant health insurer raised 2016 premiums an average of 17.8 percent on individual policies sold on or off the exchange, according to HealthCare.gov.

Competitors also boosted rates, some even higher than Blue Cross. But Blue Cross' price jump could affect more than 329,000 people in Illinois, according to its rate filing. Roughly eight out of every 10 of those who enrolled in ACA plans are insured by Blue Cross.

The company also made significant changes in provider networks. It is no longer selling its most popular PPO plan. While the plan was one of the most expensive in the state, consumers liked it because it offered broad access to specialists and hospitals.

Blue Cross also made changes to deductibles and other cost-sharing elements that shift more health care expenses to consumers. For example, Sabor paid a $30 copay to visit her primary care doctor and $60 to see a specialist. The copays go away in the new policy that Blue Cross offered her. Instead, Sabor would have to pay the full cost of an office visit until she meets her $4,500 deductible.

Blue Cross declined an interview request to discuss the rate increase and other benefit changes. Michael Deering, a company spokesman, provided a statement: "From our experience in the individual market, we have seen individuals use many more health care services than expected. Because of that as well as rising medical and pharmaceutical expenses, we had to adjust our pricing accordingly."

The substantial increase in prices reflects how Obamacare remains a work progress. One of the aims of the law was to make insurance more affordable, but the surge in premiums has Americans complaining.

In the first two years insurance companies kept premiums relatively low, but they increased deductibles, the amount a consumer pays for care before insurance kicks in. Even with high deductibles, insurers have struggled to make a profit on Obamacare plans.

In its 2016 rate filing, Blue Cross said claims in 2014 outpaced premiums on individual policies by nearly $280 million.

The federal government is partly responsible for troubles with the law, industry experts said. The Obama administration allowed people who bought individual plans before 2010 to keep their plans to 2017. The individual market before Obamacare tended to have healthier people because insurers could deny coverage to sick people. The uninsured who bought policies on exchanges had pent-up demand for medical services, said Chris Sloan, a manager at Avalere Health, a consulting firm.

The administration said the vast majority of exchange enrollees receive premium subsidies that can protect them from increased costs.

Terry Cessna of Monee disagrees. He is 70, collects Social Security and is insured by Medicare. His 60-year-old wife, however, went uninsured when he retired as a quality control manager in 2012. He said he was thrilled when he could buy a government-subsidized policy for her. Her monthly premium in 2014 was about $77, after a $253 subsidy.

This year, her subsidized premium increased to $118. "I was a little upset, being on a fixed income and all, but still grateful that she was insured," Cessna wrote in an email.

In October, Blue Cross, he said, "lowered the boom." The company notified him that it was canceling her HMO plan. It offered a replacement plan with a subsidized premium of $282.

The Blue Cross letter also contained a long list of "significant changes" to the replacement HMO plan. Among them:

•The copay for a primary care visit will increase from $25 to $50.

•Coinsurance, the share of medical costs a policyholder is responsible for after meeting the deductible, rises from 30 percent to 50 percent.

•The out-of-pocket maximum goes from $6,250 to $6,850.

•The copay for a hospital stay increases from $300 to $750. The copay for outpatient surgery doubles to $500. The payment for a visit to the emergency room rises $400 to $1,000.

•The plan also added a new cost-sharing piece: an inpatient per-day copay of $750.

"Jiminy Christmas. As I read through this, everything is going up," Cessna said in an interview.

His wife, Susan, was recently diagnosed with dementia, he said. Going without insurance is not an option. Cessna recently took a part-time job to help make ends meet. The extra income, ironically, will reduce his premium subsidy, no matter what policy he buys.

Blue Cross' spokesman said fixed cost-sharing amounts may have to be adjusted due to year-over-year medical and pharmaceutical trend increases. He said the company also added some free primary care visits and a broader choice of deductible and cost-sharing options, based on customer feedback.

Rate increases are not isolated to Blue Cross and to Illinois. The average lowest-price Silver plan rose 13 percent in states like Illinois that use the federal exchange, compared to a 3.2 percent increase from 2014 to 2015, according to Avalere Health.

Insurance companies have said that in the first two years of Obamacare they priced their plans without a clear understanding of the pool of customers that would buy plans. Under the health law, insurers must provide a basic set of benefits and cannot turn away consumers, even if they are sick.

In some cases, though, insurers may have intentionally priced their polices too low in the first two years of Obamacare to attract customers, industry experts said.

In year three, "they (insurers) say they are offering rates that are more reflective of medical claims," said Kevin Lucia, a research professor at the Center on Health Insurance Reforms at Georgetown University.

The Illinois Department of Insurance approved Blue Cross' rate increase, saying the company "provided sufficient support for their assumptions and rating methodology," according to HealthCare.gov. The department declined an interview request.

The big question during open enrollment, Sloan of Avalere said, will be whether rate increases lead consumers to switch plans. In employer-based coverage, research shows that few people switch plans to reduce their health insurance costs or to get a better-quality plan.

Sabor, for one, is shopping around on HealthCare.gov. Before the Affordable Care Act, the cheapest insurance she could find for her and her husband cost $1,800 a month. They are both self-employed and don't qualify for subsidies.

"I still think the concept is a good thing," said Sabor, a freelance court reporter. "My issue is it looks like the insurance companies can do whatever they want."

She found a policy offered by Land of Lincoln Health that has their doctors in network. The estimated premium for the two of them is $991. But the coinsurance is 40 percent, compared to 30 percent with the Blue Cross plan, she said.

After she received the letter from Blue Cross, she considered going without insurance and paying the penalty. But she said she quickly thought better of it.

"I'm too afraid," Sabor said. "But it's upsetting that you would have to think that."

A version of this article appeared in print on November 17, 2015, in the News section of the Chicago Tribune with the headline "Blue Cross users in Illinois get dose of sticker shock - Obamacare rates climb overall; biggest insurer raises premiums 17.8%" —
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